It was an economic news story that may be about more than the economy. A recent Associated Press article by Emery Dalsio on WRAL.com documented the loss of middle class jobs here in North Carolina, and how we compare with the rest of the country.
Dalsio wrote, “The collapse of middle-class jobs since the turn of the 21st Century has been worse in North Carolina than the rest of the country, a university economist says in an upcoming book forecasting the state’s future. While the number of middle-class jobs rose by 6 percent nationwide between 2001 and 2015, there were 5 percent fewer in North Carolina, North Carolina State University’s Michael Walden found. Meanwhile, high- and low-paying jobs each increased in North Carolina by more than 25 percent, up to three times faster than the rest of the country.”
So, what does that mean to us? Most economists consider the American middle class family to now have a total income of between around $50,000 to $110,000 per year for a four person household. The median yearly income for the middle class family of four is around $68,000 a year.
Politicians from both parties will emphasize that a strong and healthy middle class is a sign of a strong and healthy overall American economy. That’s why they are fighting (they always say they are fighting) to help preserve and grow the middle class. Evidently they are not doing too good of a job. According to a report from the International Labour Organization and the International Institute for Labour Studies, only about 51% of U.S. adults lived in middle-income households in the U.S. in 2010, down from 61% in 1970. And the median middle class wage dropped 5% during that time. If you want to be quick to lay blame, remember both political parties were in power just about equally during that time.
What has happened during the last forty years to cause the drop in the number of middle class and their income? Basically the U.S. has changed from a manufacturing economy to a service economy. We don’t make things like we used to. In the past, many of those manufacturing jobs paid good wages and good benefits, especially for workers without advanced education degrees. (Some would argue, that many of those jobs eventually ended up being shipped overseas, or across the border. But many of those jobs are now being done by a computer, a machine or a robot.) So when those manufacturing jobs were lost, so likely was the chance of getting another good paying manufacturing job. If, or when, a new job was found it would be probably be in the service economy, like retail, at a lower wage, with less benefits. There are other reasons, but whatever the reason, it’s obvious that the American middle class is shrinking. Of course, there have been those who have prospered over the last forty years, and have moved up out of the middle class. But the 10% decline in the American middle class is primarily due to those dropping down and heading toward poverty.
But why is having a strong American middle class so important? On a purely economic basis, people having less income means having less income to spend. Since our economy is now based on consuming things, instead of making things, the whole economy suffers.
A strong middle class is needed for more than economic reasons. Ultimately, a strong middle class is what holds society together. In most cases, they are the backbone, providing time, manpower, and finances to local schools, churches and civic organizations. A shrinking middle class often means less available resources for those entities that are so important to the life of our community and nation.
Many who earn more, and many who earn less, consider themselves middle class, even though they may not technically fall in the category. They adhere to middle class values. It helps us to feel like a unified people, with a common set of values and goals. But individuals are reluctant to invest time and resources for the common good in which they feel they have little in common. If all you have is a small, rich upper class and a large, vast poverty class, with little in the middle, and little in common, you are asking for trouble. Big, societal trouble. And gated communities, private schools, and home security systems won’t provide much protection from a culture that is broken.
Maybe that’s why politicians from both parties are “fighting” to preserve the middle class. Or, maybe, they are just fighting to hang on to their own piece of the pie before it is all gone.